Digital banking can be Islamic too: A new chapter for ethical finance in Bangladesh

When Bangladesh Bank Governor Dr Ahsan H Mansur recently said that "Digital Banking can also be Islamic Shariah-compliant, providing innovative solutions to serve all people of Bangladesh," his words resonated far beyond the financial sector. It was not just a statement about banking, it was a vision for how technology, faith, and inclusion can coexist to shape a fairer economic future.

For many Bangladeshis, banking is not just about managing money. It's about trust, values, and a sense of belonging. Yet, millions of people remain unbanked; not because they don't want financial services, but because the existing ones often don't align with their beliefs or feel distant from their daily realities.

According to the Global Findex Database 2021, about 60 million adults in Bangladesh still don't have access to formal financial services. Many of them live in rural areas, depend on informal systems, or avoid interest-based banking for religious reasons. At the same time, Islamic finance already accounts for over 22% (Bangladesh Bank & S&P Global 2025) of total banking assets in the country. This clearly shows that faith-based finance has a strong foothold but its reach and accessibility remain limited.

Now imagine combining the ethical foundation of Islamic finance with the convenience of digital technology. Picture a farmer in Rangpur checking his balance through a mobile app that follows Shariah principles. Or a young entrepreneur in Khulna applying for an interest-free investment facility online, without needing to visit a branch. Or a garment worker in Gazipur saving small amounts through a digital platform that not only feels trustworthy but also reflects her values.

That's the promise of Islamic digital banking; a model where technology amplifies trust, and faith meets innovation. It's not just about digitising Islamic banking; it's about democratising ethical finance.

The timing couldn't be better. Bangladesh's digital infrastructure has grown remarkably, smartphone penetration exceeds 80%, and mobile financial services reach tens of millions daily. The foundation is already in place what's needed now is a framework that lets digital banking evolve responsibly, with options that include Shariah-compliant models.

Such a move would not only support the Future Bangladesh Vision but also help build a more inclusive and resilient economy. Digital Islamic banking can empower micro and small businesses, support women-led ventures, and bring rural communities into the formal financial fold — all while upholding principles of fairness, transparency, and shared prosperity.

Moreover, Islamic finance has natural alignment with sustainable and responsible investing. It discourages speculation, promotes real economic activity, and encourages risk-sharing; values that the global financial community increasingly recognises as essential to long-term stability. In this sense, Islamic digital banking isn't just a faith-based choice; it's a strategic choice for sustainable growth.

Islamic micro-finance can further strengthen this promise. As an asset-based system, it ensures borrowers purchase goods or productive assets rather than taking direct cash, significantly reducing the risk of fund diversion, a major challenge in traditional microfinance. Digital Islamic Banks, with lower operational and Shariah compliance costs, are uniquely positioned to overcome this challenge while expanding access across rural Bangladesh.

This model of digital Islamic micro-finance can become a powerful tool for sustainable rural development, enabling farmers, small traders, and women-led ventures to access ethical financing options that align with their values.

Dr. Mansur's statement was, therefore, more than a policy hint; it was a call for imagination. A reminder that innovation in finance doesn't have to compromise on ethics. That technology, when guided by values, can deepen trust rather than erode it.

Bangladesh has always been a country of resilience and reinvention. From digital payments to mobile remittances, we've seen how technology can transform lives when made accessible to all. The next step is to ensure that this transformation is also inclusive in spirit, serving people's financial needs while respecting their faith and principles.

Another major opportunity lies in mobilising benevolent Islamic funds - Zakat, Sadaqah, Charity, and WAQF, through digital banking networks. Countries like Malaysia, Indonesia, and Pakistan have already integrated these funds into formal systems, with global Zakat collections estimated at USD 10–15 billion annually and a potential reaching $200 billion to over $1 trillion. Islamic Digital Banks in Bangladesh can replicate this approach by collecting and channeling these zero-cost social funds at the rural level with transparency and efficiency.

The future of banking in Bangladesh will not just be digital. It will be ethical, inclusive, and deeply human.

Ahsan Zaman Chowdhury is the managing director of Trust Bank.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.